An additional $14 billion dollars in relief has been approved for farmers who continue to face market disruptions and associated costs because of COVID-19. The U.S. Department of Agriculture (USDA) will use funds being made available from the Commodity Credit Corporation (CCC) Charter Act as well as the Coronavirus Aid, Relief and Economic Security (CARES) Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities. Signup for the Coronavirus Food Assistance Program (CFAP2) runs through December 11, 2020.
Farm organizations, including the American Soybean Association (ASA), welcomed the second round of relief because farmers faced significant losses in 2020 due to COVID-19. A study commissioned by the National Oilseed Processors Association and the United Soybean Board identified a $4.7 billion market loss for soybean growers and crushers between January and June of 2020.
While sales and soybean prices have improved in recent weeks, many soybean farmers presold portions of their crop at much lower prices before the prices rebounded. CFAP2 only pays 54 percent of the actual production history (APH). Soybean industry leaders stress that the CFAP programs won’t make agricultural producers whole, but the aid will assist farmers who have been navigating various obstacles this year.
Unlike the first round of CFAP payments, which was based on unsold inventory for 2019 row crops, CFAP2 is based on acres that were planted in 2020. For a crop to be eligible, the national price had to decline by at least five percent between the week of January 13-17, 2020, and July 27-31, 2020.
The payment rate for soybeans (per acre) is the higher of $15 or the product of the nationwide crop-marketing percentage, the crop-specific payment rate and the producer’s 2020 APH yield from crop insurance. The nationwide crop-marketing percentage and crop-specific payment rate for soybeans are 54 percent and $.58, respectively.
The per acre payment rate is the maximum of $15 and $.3132 per bushel times the APH yield per bushel for soybeans. If an APH yield is not available, 85 percent of the weighted 2019 Agriculture Risk Coverage-County Option (ARC-CO) will be used instead. The per acre rate is multiplied by the acres reported to the Farm Service Agency (FSA) on the crop acreage report, excluding prevented plantings and experimental acres. The USDA estimates that soybean CFAP2 payments will total $1.4 billion and that payments for the entire program will be $13.2 billion.
The sign-up period ends on December 11, 2020, and sign-up can be done at https://www.farmers.gov/sign-in or at the local USDA Service Center.